Okonjo-Iweala warns against hasty launch of ECOWAS monetary union

The Coordinating minister for the Economy and minister of Finance, Dr. Ngozi Okonjo-Iweala, has cautioned Economic Community of West African State, ECOWAS, against a hasty launch of the proposed monetary union.

Under the arrangement, member states will use a single currency, ECO, just like what obtains among members of the European Union where the Euro is now in use.

Addressing the Convergence Meeting of West African Monetary Zone, WAMZ’s, Ministers of Finance and Central bank Governors in Abuja, yesterday, Dr. Okonjo-Iweala argued that the sub-region must be fully ready through a sustained macro-economic stability among member states before launching the monetary union.

Her words, “we must take cognizance of the recent happenings in the Euro Zone and ensure that the lessons learnt are fully integrated in the recommendations that you will be making so as to avoid the pitfalls that bedeviled that monetary zone.

“While I urge all of us to work hard towards meeting the set target date, we must not forget that the most sacrosanct objective in this endeavour is not a hasty launch of our monetary union but an enduring and sustainable one that can stand the test of time when it is put in place. In a nutshell, we should only fell compelled to launch when we are comfortable that the economic fundamentals for a successful monetary union are in place”.

Dr. Okonjo-Iweala insisted that all member states must be ready before the launch in order to avoid a situation where some would pull out midway.

She said, “I think the issues of a monetary union is a serious affair. The EU has been at it for some time, in spite of that look at the challenges they are facing- where some members were not ready. They went into the union and it was not a very solid platform.

“Consequently , when the financial crisis came, they were not able to withstand it. There is nobody chasing us. We have a target date but let us have a quality launch that will be sustained. Members will begin to exit when they cannot cope up with the criteria and that doesn’t help. So I want all the countries to focus on those criteria , especially the macro-economic ones”.

She added that Nigeria, being the largest economy in the sub-region would be the worst-hit should the union go awry.

“ Nigeria is the largest economy. We are likely to bear the brunt. So we don’t want any union or launch of a monetary union that is not built on a solid ground.

“But I must commend the countries. They are trying very hard. So let us take our time. If the time comes and we are not quite ready we shouldn’t be shy to say we are not ready, rather than rushing into it because the consequences of a failed monetary union are severe.

“So we should do it in such a way that we can always reflect. Let them stock now and see how far we have gone but if we are not ready, let us not be shy , rather than pre-maturely pronouncing. Let us have a quality launch”, the minister said.

Dr. Okonjo-Iweala also said that the community needed to pay particular attention to local production of goods to avoid a situation where it would be turned into a dumping ground for manufactured goods from other regions of the world- a situation she warned could hurt member countries’ economies.

In his remarks, the President of the ECOWAS Commission, Dr. Kadre Ouedrogo, said that Security Ministers of member states would meet to critically look into the security implications of an ECOWAS where citizens would move freely without Resident Permits.

He said that the objective of the union was to create a sub-region where there would be genuine integration of people, not just integration of countries.